Eligible persons who do not elect to be treated as private patients
on admission to a public hospital are entitled to receive all necessary
medical, nursing, allied health and diagnostic services at no charge.
Charges may only be levied on public admitted patients if they
are classified as nursing home type patients.

3. Private Admitted Patients

3.1 Overnight Stay Patients

Section 72.1(2) of the Private Health Insurance Act 2007 states that an insurance policy covering hospital treatment must provide at least the ‘minimum benefit’ for that treatment. The Commonwealth Minister for Health stipulates the minimum benefits payable by private health insurers for shared ward accommodation in public hospitals through the Private Health Insurance (Benefit Requirements) Rules. The Commonwealth does not set a minimum benefit for single room accommodation.

Health services are able to make their own determination on accommodation fees to be charged to private patients who receive treatment at their campuses (NOTE: This also applies to sameday patients). In coming to this decision, health services should consider the following:

the benefit that private health insurance funds will assign to the public hospital in their health insurance products

any copayment a patient may be willing to pay as a private patient

the amount of any copayment or excess the hospital can viably forego.

To assist health services with this decision, the department provides a guide of average costs and nominal cost recovery rates for private patient accommodation in the Fees Manual.

For patients who elect to be treated as private patients, hospitals will make all reasonable endeavours to:

encourage patients to contact their doctor and health fund to discuss the financial implications of an upcoming episode of hospitalisation any copayment a patient may be willing to pay as a private patient

make provision in hospital admission papers (for public hospitals: in the standard in-patient election form) for patients to sign an acknowledgement that they have given Informed Financial Consent.

except where the admission is an emergency, ensure hospital admission procedures, information systems and admission forms facilitate the effective operation of the process, including an Informed Financial Consent proforma with other admission papers for patients to sign (if one has not been signed prior to admission).

The Private Health Insurance (Health Insurance Business) Rules 2007 Part 3 Section 8(b) state that treatment provided to a person in an emergency department of a hospital is excluded treatment for the purposes of Private Health Insurance. Health Services should ensure that private health funds are not billed for services provided to private patients within the emergency department.

The department’s guide for private patient fees for 2015-16 are outlined below.

Shared Ward Accommodation

For 2016-17, the department has continued to align its recommended shared room fees
with the Commonwealth's default minimum benefits to ensure that private patients
do not incur gap payments or out of pocket expenses.
Health services should note analysis by the department which shows that the
actual cost of providing accommodation to private patients is significantly higher
than the Commonwealth’s minimum benefits.

Patient classification

Commonwealth minimum benefit for shared ward accommodation 2016-17

Estimated costs for 2016-17 (i)

Average cost

Interquartile range

Lower

Upper

Advanced surgery 1 (1-14 days)

Advanced surgery 2 (15+ days)

$415

$289

$823

$710

$660

$624

$903

$839

Surgery/obstetric (1-14 days)

Surgery/obstetric (15+ days)

$386

$289

$964

$708

$686

$607

$1,190

$822

Psychiatric 1 (1-42 days)

Psychiatric 2 (43-65 days)

Psychiatric 3 (66+ days)

$386

$334

$289

$836

$802

$785

$723

$744

$743

$916

$929

$934

Rehabilitation 1 (1-49 days)

Rehabilitation 2 (50-65 days)

Rehabilitation 2 (66+ days)

$386

$334

$289

$557

$562

$579

$501

$498

$482

$657

$673

$686

Medical 1 (1-14 days)

Medical 2 (15+ days)

$334

$289

$738

$720

$608

$614

$829

$805

(i) The Average cost is based on the 2014-15 Victorian Cost Data Collection using IPHA indexation rates for for the ensuing years to 2016-17. Includes capital and depreciation loading. The Interquartile range is the range in which 50% of all reported costs fall.

The circumstances under which Rehabilitation and Psychiatric fees can be charged by hospitals were clarified under changes to the Private Health Insurance (Benefit Requirements) Rules 2011. Payment for patients undergoing psychiatric or rehabilitation treatment, is subject to health insurer approval of a particular treatment program and the relevance to the patient diagnosis. Refer circular PHI 78/11.

Single Room Accommodation

Patient classification

Estimated costs for 2016-17 (ii)

Average cost

Interquartile range

Lower

Upper

Advanced surgery 1 (1-14 days)

Advanced surgery 2 (15+ days)

$842

$819

$706

$683

$921

$912

Surgery/obstetric (1-14 days)

Surgery/obstetric (15+ days)

$1,030

$819

$773

$583

$1,233

$961

Psychiatric 1 (1-42 days)

Psychiatric 2 (43-65 days)

Psychiatric 3 (66+ days)

$983

$783

$751

$698

$562

$560

$1,115

$810

$806

Rehabilitation 1 (1-49 days)

Rehabilitation 2 (50-65 days)

Rehabilitation 2 (66+ days)

$551

$597

$589

$424

$426

$425

$643

$648

$924

Medical 1 (1-14 days)

Medical 2 (15+ days)

$796

$806

$669

$688

$934

$902

(ii) The Average cost is based on the 2014-15 Victorian Cost Data Collection using IPHA
indexation rates for for the ensuing years to 2016-17. Includes capital and depreciation
loading. The Interquartile range is the range in which 50% of all reported costs fall.

The circumstances under which Rehabilitation and Psychiatric fees can be charged by
hospitals were clarified under changes to the Private Health Insurance (Benefit
Requirements) Rules 2011. Payment for patients undergoing psychiatric or rehabilitation
treatment, is subject to health insurer approval of a particular treatment program and the
relevance to the patient diagnosis.
Refer circular PHI 78/11.

Note: Where a patient is placed into a single room and they have elected to have a
single room they are to be charged the single room rate. Hospitals should not
retrospectively seek a single room election from a patient after a private patient is
placed into a single room for clinical need.

Patient Classifications

The classifications advanced surgical, surgical and other are defined in Schedule 1 of the Private Health Insurance (Benefit Requirements) Rules 2011, made under the Private Health Insurance Act 2007. The item numbers contained in each classification are taken from the Medicare Benefits Schedule (MBS) and based on the complexity and fee charged for the procedure.

The determinations contain schedules of MBS item numbers for professional services under each patient classification. Schedule 1 specifies:

advanced surgical patient: is specified in Part 2
of this Schedule and the item numbers are derived from the MBS.

surgical patient: is specified in Part 2 of this
Schedule and the item numbers are derived from the MBS.

obstetric patient: is specified in Part one of this
Schedule. (definition taken from Part 2 of Schedule 1)

psychiatric patient: is a patient in a hospital who is admitted for the purposes of undertaking a specific psychiatric treatment program that is deemed by the insurer to be relevant and appropriate for the treatment of the patient's disease, injury or condition.(definition taken from Part 2 of Schedule 1)

rehabilitation patient: is a patient in a hospital who is admitted for the purposes of undertaking a specific rehabilitation treatment program that is deemed by the insurer to be relevant and appropriate for the treatment of the patient's disease, injury or condition.(definition taken from Part 2 of Schedule 1)

other patient: are deemed to be any patients in a hospital other than advanced surgical, surgical, obstetric, psychiatric, or rehabilitation patients.(definition taken from Part 2 of Schedule 1)

The following fees are charged for all same day patients who, on admission to a public
hospital, have elected to be treated as private patients. Same day patients admitted for
minor procedures(that is, those procedures contained in the Commonwealth's Type C
exclusion list) must be certified as requiring hospital admission.

Patient classification

Commonwealth minimum benefit for same day accommodation 2016-17

Estimated costs for 2016-17 **

Average cost

Interquartile range

Lower

Upper

Same day - Band 1

Same day - Band 2

Same day - Band 3

Same day - Band 4

$244

$289

$335

$386

$311

$261

$206

$282

$71

$32

$21

$35

$409

$345

$341

$409

** The Average cost is based on the 2014-15 Victorian Cost Data Collection using IPHA
indexation rates for for the ensuing years to 2016-17. Includes capital and depreciation
loading. The Interquartile range is the range in which 50% of all reported costs fall.

(See section on Compensable Patients for compensable same day patients).

Same Day admissions are generally governed by Commonwealth legislation. Decisions on whether to admit or not admit patients as same-day cases revolve around explicit inclusions and exclusions for procedures/conditions set by the Commonwealth.
Comprehensive lists covering procedures considered to be Type B and Type C are maintained, and are referred to as the:

FOR ENQUIRIES/INFORMATION on the Type B and Type C
procedure lists; Day Only Procedures Manual, and Internet site address,
you can contact the Private Health Industry Branch, Commonwealth Department
of Health and Aged Care via their 24 hour answering machine service
(02) 6289 9853 or Email the enquiry to PrivateHealth@health.gov.au.